Pure Storage (PSTG) and HPE (HPE) Shares Slide 7% After Downgrades to Neutral at Bank of America
- World stocks in red as consumers signal recession ahead
- JPMorgan Reiterates Amazon, Booking, and Uber as Top Internet Stocks to Own
- Pinterest (PINS) CEO Silbermann Is Stepping Down, Shares Gain 8%
- Morgan Stanley Downgrades Upstart to Underweight, Price Target Cut by Nearly 80%
- Euro trims declines after Spain inflation surge
Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.
Bank of America analyst Wamsi Mohan downgraded shares of Pure Storage (NYSE: PSTG) and Hewlett Packard Enterprise (NYSE: HPE) to Neutral from Buy as he takes a more cautious position on stocks in the bank’s IT Hardware Industry research coverage.
Mohan’s actions come as he sees more downside possible in this sector given that historically IT Hardware coverage has declined 40-60% in a past downturn. Given that the coverage is now down 23% YTD, there’s much more room for a possible fall in valuations of IT hardware stocks.
On HPE, the new price target is $16.00 per share, down from $19.00.
“Given a worsening supply chain due to recent China lockdowns (negative commentary from Cisco, continued logistical challenges from protracted lockdowns), we expect negative estimate revisions and we are incrementally worried about order deceleration. We see some risk to HPC revs from slower customer acceptance and associated margin pressure,” Mohan said in a client note.
The new price target for PSTG is $27.00 per share, down from $34.00.
“We are cautious on demand trajectory over the next several quarters, where our checks (see our VAR surveys: Dell, NTAP) indicate that confidence in storage spending is turning lower. Storage has also been relatively immune to supply chain issues and pent-up demand is a lower tailwind.”
Shares of both companies are down over 7% today.
By Senad Karaahmetovic
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: BofA Securities Downgrades Teradyne (TER) to Neutral
- HDFC Asset Management Co Ltd (HDFCAMC:IN) PT Lowered to INR2,330 at CLSA
- Credit Suisse Downgrades Liberty Financial Group (LFG:AU) to Neutral
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades, Hot Downgrades, Hot List
Related EntitiesBofA/Merrill Lynch, Senad Karaahmetovic
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!